After termination of the Bhc Franchise Agreement, can a member of the franchisee's immediate family engage in a Competitive Business without the Franchisor's written consent?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (9) The undersigned has acquired from the Franchisor confidential information regarding Franchisor's trade secrets and franchised methods which, in the event of a termination of the Franchise Agreement, could be used to injure the Franchisor. As a result, neither the undersigned, nor any member of his or her immediate family, shall, for a period of two (2) years from the date of termination, transfer or expiration of the Franchise Agreement, without having first obtained the Franchisor's written consent, engage in or participate as an owner, officer, partner, director, agent, employee, shareholder or otherwise in any Competitive Business which is located or operating, as of the date of such termination, transfer or
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, both during the term of the Franchise Agreement and for a period of two years after its termination, neither the franchisee nor any member of their immediate family can engage in a Competitive Business without first obtaining Bhc's written consent.
This restriction applies to being an owner, officer, partner, director, agent, employee, shareholder, or otherwise participating in a Competitive Business. After termination, this restriction is limited to a 25-mile radius of the franchisee's former location or within a 10-mile radius of any other franchised or company-owned Bhc restaurant.
This clause aims to protect Bhc's confidential information and market presence. A prospective franchisee should carefully consider the implications of this non-compete agreement, especially if family members might consider involvement in similar businesses, as obtaining consent from Bhc is required. It is important to understand what constitutes a "Competitive Business" under the agreement and the process for seeking the franchisor's consent.